Europe close: Stocks advance as ECB minutes hint at fresh easing policies

European stocks gained ground on Thursday, after the European Central Bank hinted at more stimulus measures, while the US Federal Reserve looks set to hike interest rates next month.

The benchmark Stoxx Europe 600 index closed up 0.43%, while France’s CAC 40 gained 0.17% and Germany’s DAX rose 1.14%.

As of 1630 GMT, the euro was on the front foot against the main currencies, rallying 0.76% against the dollar and gaining 0.18% and 0.11% against the pound and the yen respectively, while Brent crude gained 0.32% to $44.28 a barrel.

ECB minutes point to more easing

The minutes from the ECB’s October meeting highlighted policymakers would consider further economic stimulus at their meeting next month.

“We continue to expect an increase in monthly asset purchases from €60bn to €80bn or more,” said Jonathan Loynes, European economist at Capital Economics.

“And this looks very likely to be accompanied by another cut in the deposit rate, of 10bp to 20bp.”

Earlier on Thursday, Peter Praet, the ECB chief economist, reiterated the central bank was willing to implement new measures to boost inflation.

"It's always a question of saying, this is our objective: we are able to act, we are willing to act [...] we have no constraints," he said.

“Inflation expectations have only partially regained the values that would indicate a rapid and sustained adjustment in the path of inflation to levels closer to 2%.”

That followed the release of the minutes from the latest Fed meeting on Wednesday night, which indicated the US central bank is set to raise short term interest rates for the first time in almost a decade.

“Higher interest rates are not in the long-run best interest of stock markets but for now there’s just a sense of relief that uncertainty over the first hike is close to being over,” said CMC Markets analyst Jasper Lawler.

On the macroeconomic front, according to data from the ECB, the current account balance, a gauge of an economy’s international position, showed a surplus of €29.4bn (£20.6bn) in September compared with €18.7bn in the previous month, marking the highest level since January.

In company news, BHP Billiton gained 0.91% after it said that maintaining its balance sheet was a priority, while French catering group Sodexo soared 9.85% after saying it would cut costs further in order to combat a volatile global economy and posting an increase in full year profit.

German diversified industrial group Thyssenkrupp rose 2.97% after it reported a 46% increase in full year net profit and lifted its dividend.